Latest news with #Kospi5
Korea Herald
06-08-2025
- Business
- Korea Herald
President orders probe into lawmaker over alleged stock trading with aide's account
President Lee Jae Myung on Wednesday ordered an investigation into Rep. Lee Choon-suak of the ruling Democratic Party of Korea over allegations that the lawmaker engaged in stock trading using an account under his aide's name. It is also believed that the stock purchases were made based on nonpublic information obtained through his official duties. "President Lee views the matter gravely," presidential spokesperson Kang Yu-jung said during a regular briefing. Kang added that the president had instructed relevant authorities to "swiftly uncover the truth and carry out a strict and impartial investigation." The president also ordered the four-term lawmaker's dismissal from his position as head of the economic subcommittee under the presidential state affairs committee, a temporary advisory body tasked with strengthening policy coordination. The remarks followed a growing controversy sparked by a media report earlier this week showing the lawmaker using a mobile trading app during a plenary session at the National Assembly on Monday. A photograph released by online news outlet The Fact on Tuesday showed the lawmaker appearing to access a stock account registered under the name of his aide, identified only by the surname Cha. The account reportedly held over 100 million won ($71,900) worth of shares, including 537 of Kakao Pay, 150 of Naver and 420 of LG CNS — all major tech companies listed on the country's benchmark Kospi index. In October, he was also reportedly photographed accessing the same account during a parliamentary audit session. Public backlash mounted amid growing speculations that lawmaker Lee might be trading stocks under someone else's name, because Lee had reported that neither he nor any of his family members owned stock assets in his year-end asset disclosure filed on Dec. 31 last year. Lee withdrew from the Democratic Party late Tuesday and resigned as chair of the National Assembly's Legislation and Judiciary Committee. The main opposition People Power Party strongly condemned the lawmaker's conduct. People Power Party spokesperson Rep. Kwak Kyu-taek on Wednesday said, "The fact that someone responsible for overseeing the legislative process and upholding justice is implicated in such an act shakes the ethical foundation of the entire Assembly" in a statement issued on Wednesday. Kwak further raised suspicions of insider trading, citing Lee's concurrent role overseeing AI policy at the presidential committee. He noted that Naver and LG CNS — whose shares appeared in the aide's account — were named later that same day as key participants in the government's official AI development initiative. "Was the Kospi 5,000 goal meant for Rep. Lee alone?" Kwak added in the same statement, referring to President Lee's policy drive to usher in a "Kospi 5,000 era." In June, President Lee had also warned that 'those who manipulate the stock market will be ruined,' as part of that initiative. Rep. Song Eon-seog, interim leader of the People Power Party, said the lawmaker's resignation from his legislative post does not resolve the issue, adding that the party would file a complaint with the National Assembly's Ethics Committee and pursue criminal charges against Lee. The scandal has fueled public anger toward the ruling bloc at a time when investor sentiment was already on edge. Frustration intensified last week after the government unveiled a tax reform plan to tighten capital gains tax rules for large shareholders, sending the Kospi sharply lower on Friday. In response to the unfolding scandal, the Democratic Party moved swiftly to cut its ties with the lawmaker. "We were preparing to impose strong disciplinary measures internally, but Rep. Lee preemptively left the party," said party leader Rep. Jung Chung-rae during a Supreme Council meeting at the National Assembly on Wednesday. "Nevertheless, we will proceed with expulsion." "I will work to restore discipline among lawmakers and ensure that such incidents do not happen again," Jung added. As of Wednesday, both Lee Choon-suak and his aide had been booked by the Yeongdeungpo Police Station in Seoul. Lee is under investigation for violating the Real Name Financial Transactions Act, while his aide Cha is being investigated for abetting the alleged offense.
Business Times
16-07-2025
- Business
- Business Times
South Korea seeks to unlock property money in ‘Kospi 5,000' drive
SOUTH Korea is seeking to redirect household wealth concentrated in real estate into equities, according to a lawmaker spearheading a committee tasked with supercharging the nation's stock market. 'Reviving the stock market is one of the president's key political goals,' Oh Gi-hyoung, chairperson of the special committee on 'Kospi 5,000', said in a Bloomberg News interview this week. 'He hopes to see capital shift from the property market into equities.' The ruling Democratic Party lawmaker's comments underscore the extent to which President Lee Jae-myung is pushing for higher equity valuations. While optimism over corporate governance reforms has already made the Kospi one of the world's best-performing benchmark indices this year, the new administration's view is that the rally could extend if capital can be more effectively reallocated. South Koreans' long-held penchant for property has fuelled a rise in home prices and turned real estate into a magnet for speculators. A 2024 Bank of Korea survey showed only a quarter of household assets were in financial investments, while 75 per cent were tied up in real assets – mostly real estate – an exceptional level of concentration by global standards. Retail investors – roughly 14 million out of the nation's 52 million population – have gained political clout as their ranks swelled during the pandemic-era investment boom. Former president Yoon Suk-yeol also promoted stock-friendly initiatives during his term. The ad hoc Kospi 5,000 committee was formed last month, with its name suggesting an index target that is 55 per cent above Tuesday's (Jul 15) close. The slogan has sparked both optimism and skepticism about the feasibility of reaching that goal. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Oh said 5,000 is not a numeric target, but more of a symbolic phrase to emphasise policy commitment. 'The index has been suppressed for too long, and the goal is to bring it back to a healthy level – not to hit that number by a specific date. And we're not excluding Kosdaq from the picture.' He also dismissed concerns over a potential bubble in stocks, saying the market is currently at a 'normalisation stage'. The Kospi has gained about 33 per cent so far this year to near a record high. The gauge is trading at 10.7 times 12-month forward earnings estimates, compared with a ratio of 15 for Japan's Topix. A key driver for the upswing was the passage of the commercial code revision, aimed at improving corporate governance and helping protect the rights of minority shareholders, after Lee's election win in June. 'Organisations like the Federation of Korean Industries wouldn't have seen the Commercial Act passing,' Oh said, referring to the body representing the country's conglomerates. 'They were caught off guard and now scrambling to respond.' BLOOMBERG
Business Times
03-07-2025
- Business
- Business Times
South Korea passes commercial Bill revision to tackle ‘Korea discount'
[SEOUL] South Korea's parliament passed on Thursday (Jul 3) a revision to the Commercial Act to expand the fiduciary duty of board members to protect the interests of minority shareholders and try to boost the country's corporate market valuations. President Lee Jae-myung, who was elected last month, had pledged to support the legislation to help eliminate what is known as the 'Korea discount'. The discount refers to the lower valuations that South Korean companies typically trade at relative to their global peers, partly reflecting the dominance of family-owned conglomerates that have been criticised for putting their interests ahead of other shareholders. A previous version of the Bill approved by parliament was vetoed by the conservative government of Lee's predecessor. The latest version was a compromise backed by the conservative main opposition party. 'I am confident that the stock market improvements of revising the Commercial Act and eliminating negative competition factors will make the situation better than now,' Lee said at a news conference earlier on Thursday. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Lee said he had expected the country's benchmark Kospi stock index to rise above 3,000 points just by normalising the country's system, after six months of a leadership vacuum, and reaffirmed his pledge to usher in a period when the index tops 5,000. It has been part of Lee's 'Kospi 5,000' initiative to amend the Commercial Act, along with other market reforms including winning an upgrade from emerging market to advanced market by global index provider Morgan Stanley Capital International. 'The amendment will raise foreign investors' confidence in domestic capital markets and the possibility of South Korea winning developed market status from index provider MSCI in the coming years,' said Seo Sang-young, an analyst at Mirae Asset Securities. However, groups representing both large and small businesses expressed concern that the amendment does not do enough to protect directors from lawsuits, or company boards from speculative investors. 'We hope that discussions on ensuring defence measures for management rights... will take place as soon as possible,' said a statement from eight local business lobby groups, including the Federation of Korea Industries, the Korea Chamber of Commerce & Industry and the Korea Federation of SMEs. The government plans to set up a task force on winning developed market status, the country's vice finance minister said this week, after MSCI said last month in its annual review that it would continue to monitor market accessibility in South Korea. The Kospi rose 1.34 per cent on Thursday to close at 3,116.27 points, the highest since Sep 27, 2021, as investor sentiment was also buoyed by optimism around US tariffs after the trade deal with Vietnam reached by US President Donald Trump's administration. REUTERS
